Hedge Fund Chief: U.S. Needs Strong Middle Class To Survive

Billionaire Ray Dalio, the founder and co-chief investment officer of Bridgewater Associates, the world's largest hedge fund, believes that fundamental changes must occur in the United States if it is to recover from economic turmoil and overcome political polarization, Zachary Crockett reported for The Hustle.

Photo Insert: Ray Dalio is the founder and co-chief investment officer of Bridgewater Associates, considered the world's largest hedge fund.

In Crockett's interview with Dalio, the hedge fund chief, revealed three current events happening in the United States right now: “First, the creation of enormous amounts of debt and the printing of a lot of money. This results in inflation, which takes buying power away from people. Second, internal conflicts. Political conflict between the left and the right, the haves and the have-nots, and people with different values. And third, a great power conflict on a global stage. In 1945, the US had 80% of the world’s gold, and we accounted for 50% of the world’s economy. And we had a monopoly on military power. And now that gap has narrowed.”

The national debt has now reached $30 trillion, an increase of $7 trillion since 2019. How did we end up here? Credit creation stimulates. When you are in a bad situation, you are given a large amount of credit.

However, credit creates debt that accumulates over time. There has recently been a desire to give people a lot of money, following the 2008 recession and now the COVID. So, he argued, they created a lot of debt as a big stimulus and printed a lot of money to make it easier to pay that debt.

“During the pandemic, billionaires saw their wealth surge by 70%, to $2.1 trillion. I think we can probably both agree that capitalism run amok is not good. In your opinion, where does the current version of capitalism fall short? It falls short in delivering the basic results. I’m a capitalist. I believe in capitalism. But I think everything’s got to be reformed. The bottom 60% of the population has not had a rise in per-capita income since 1980. There are big opportunity gaps in areas like education… The most important thing is that we have to develop a solid middle — a bipartisanship of smart people who can work together across party lines to make the reforms. We can get into a type of civil war if the two extremes are fighting. This has happened repeatedly in history. A fairer society minimizes these conflicts,” Dalio concluded.

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